CFOs say finance departments are unprepared for many of the challenges they will face in the future, according to a recent survey by IBM Business Consulting Services.

In a survey of 450 CFOs from around the world, including Canada,

IBM found that two-thirds of respondents see business performance management and increased shareholder value as their top priorities in the future. As their duties shift, CFOs will increasingly hang up their mantle as mere financial policemen and step into strategic business adviser roles.

But CFOs are worried about how fit their financial departments are for the task. Among Canadian CFOs surveyed, 50 per cent felt that they didn’t have enough high quality professionals, and a third believed that their existing staff didn’t have the skills to meet the new challenges facing finance.

Performance management will have an important place on the CFO’s agenda in the future, said Tom Whelan, the financial management leader for IBM Business Consulting Services (Canada). This is being driven by the regulatory challenges and the need for greater transparency facing CFOs in the wake of the U.S.’s Sarbanes-Oxley law and the Canadian equivalent, Bill 198.

More than 53 per cent of Canadian CFOs indicated that information is a major asset that needs to be better managed. However, only 20 per cent of business managers have access to integrated enterprise data to aid in decision making. Canadian CFOs view this access as critical — however, the survey indicates that Canadian CFOs may be currently behind their global counterparts in availing themselves of technology designed to connect them to other people and information. Only 11 per cent of Canadian CFOs are using portals, whereas, on a global scale, 30 per cent of CFOs are using them.

An underlying issue is the relationship between CFOs and CIOs. Historically, a conflict was created between CFOs and CIOs, said Doron Cohen, the vice-president and research director of Gartner Financial Services in Toronto. The failure of ERP systems helped define that relationship. CFOs had unrealistic expectations and when CIOs couldn’t deliver, they took the blame. This created bitter feelings among CIOs, he said.

Historically, CFOs also trusted their audit partners more than their CIOs, Cohen added.

“”And many CIOs found it inordinately difficult to work with the CFO, because they relied on the advice that was given to them by the audit partners, to the extent that they ignored the reality that was presented to them by the CIOs,”” he said.

But these days, CFOs, who are facing more regulatory constraints, need the help of CIOs to automate compliance, he said. As for CIOs, they need to understand the business drivers behind the need to create greater transparency.

“”Unfortunately, too many CIOs come to this with a techie mindset.””

Marc Parent, the Ottawa-based vice president and CIO of the Canadian Payments Association, said he sees more of a give-and-take relationship between CIOs and CFOs. Generally speaking, the CIO has more power over the budget today, though it is obviously funneled through CFOs.

While CFOs don’t have to know the nitty-gritty of technology, they do need to have an understanding of what it can do, he said.

If the CFO is not very knowledgeable about technology, it can create a nightmare situation for the CIO, he said. In such scenarios, CIOs spend more time trying to justify projects than actually implementing them.

Whelan agreed that CFOs need to learn more about how technology can be applied, but added that CIOs also need to understand the business drivers behind technology.

“”CIOs and CFOs really do need to work more hand in hand,”” he said.

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